Trump tariffs: U.S. could owe more than $175 billion in refunds after Supreme Court ruling, estimate says

• The Penn-Wharton Budget Model estimates potential refunds exceed $175 billion, up from the $133.5 billion that U.S. Customs reported in December as being at risk
• Trump was the first president to invoke IEEPA for tariff imposition, and the Supreme Court ruling did not explicitly address whether collected tariffs must be refunded
• Dissenting Justice Kavanaugh warned the refund process would be a 'mess' and could create uncertainty around trade deals worth trillions of dollars with China, the U.K., Japan, and other nations

Summary: Supreme Court Tariff Ruling Could Cost U.S. Government $175+ Billion

The U.S. Supreme Court ruled 6-3 that tariffs unilaterally imposed by President Donald Trump are illegal, potentially triggering over $175 billion in refunds to importers, according to estimates from the Penn-Wharton Budget Model at the University of Pennsylvania.

Key Facts:

• Trump invoked the International Emergency Economic Powers Act (IEEPA) to impose tariffs without Congressional authorization—the first president to use IEEPA for this purpose
• The refund estimate of $175 billion reflects tariffs already collected from importers since the duties were imposed
• U.S. Customs and Border Protection reported in December that $133.5 billion in collected tariffs would be at risk; this figure has likely increased with ongoing collections
• Multiple importers have pending lawsuits seeking refunds, citing lower-court rulings against the tariffs

Market Implications:

The Supreme Court ruling did not explicitly address refunds, leaving the issue unresolved. However, a broad range of companies that paid these tariffs could potentially receive substantial refunds. Dissenting Justice Brett Kavanaugh warned the refund process would be a "mess" and noted complications where importers already passed costs to consumers.

Kavanaugh also highlighted potential uncertainty for trade deals worth "trillions of dollars" with nations including China, the United Kingdom, and Japan that were facilitated through these tariffs.

Impact:

The ruling creates significant fiscal uncertainty for the federal government and could provide unexpected financial relief to importers, though the complex logistics of refunding already-collected tariffs while some costs were passed to consumers remain unclear.